Annual Investment Allowance (AIA) – The amount of qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020 will go up from £200,000 to £1m.

Capital allowances – The capital allowances special rate for qualifying plant and machinery assets will be reduced from 8% to 6% (from 6 April 2019) while a new 2% non-residential Structures and Buildings Allowance (SBA) is available where contracts for physical construction works are entered into on or after 29 October 2018.

Employment Allowance (EA) – Only employers with an employer National Insurance contributions (NICs) bill below £100,000 in their previous tax year will be eligible for EA, which provides businesses and charities with up to £3,000 relief, from April 2020.

Personal Allowance (PA) and higher rate threshold – The PA and higher rate threshold will rise to £12,500 and £50,000 respectively from April 2019, one year earlier than planned. Both will remain at the same level in 2020-21 and then the PA will increase by Consumer Price Index (there is no corresponding commitment in relation to the higher rate threshold).

Off-payroll working in the private sector – In line with public-sector bodies and agencies, the IR35 extension rules will be applied in the private sector from April 2020. Responsibility for operating the charge will move from individuals to the organisation, agency or other third party engaging the worker, though small organisations will be exempt.

VAT registration threshold – The current level of £85,000 will remain for a further two years until April 2022. The government will look again at the possibility of introducing a smoothing mechanism to avoid the ‘cliff-edge effect’ for small businesses once the terms of EU exit are clear.

Duties – Fuel duty will be frozen for a ninth successive year. Duty rates on beer, most cider and spirits will also be frozen, though duty on wine will increase in line with the Retail Price Index. Duty rates on all tobacco products will increase by two percentage points above Retail Price Index inflation until the end of this Parliament.

Business rates – Bills will be cut by one-third for retail properties with a rateable value below £51,000 for 2 years from April 2019 (until the next rate revaluation).

The 5th April has now passed and it is time to start thinking about the dreaded Tax Return submission. There are clients who chose to prepare their own tax returns. However, the answers to common questions they ask, often make them change their mind and pass the task over to me.

Here are a few of the mistakes that are made:

Not using or carrying forward losses

Certain types of losses can be offset against certain types of income in the year of the loss or earlier years, which can lead to overpaying tax

Ignoring tax coding notices

Tax codes sometimes contain pensions, tax underpaid in previous years or benefits in kind, which are then ignored in the main body of the return

Not entering foreign income

Dividends from foreign investments, income from holiday rental properties and other foreign income is sometimes forgotten. UK taxpayers are taxed on their worldwide income, with double taxation relief available in certain circumstance

Not adjusting child benefit tax

If you earn over £50,000 and receive child benefit, there is likely to be an adjustment required to the tax payable to clawback benefits. This mistake leads to an underpayment of tax

Private use adjustments

Clients often forget to adjust expenditure for private use, such as telephone or motor expenses

Claiming expenses that are not allowable

Entertaining, legal fees and repairs are areas where clients often make mistakes in claiming expenses that are not tax deductible. Of course, there are also expenses which can be claimed that are missed by clients, such as use of home as office

Property rental tax changes

The rules have changed on what relief can be claimed in respect of mortgage interest on property rentals. Rent a room relief could be available and this has increased to £7,500. Wear and tear allowance is no longer available on furnished lets. All changes that can easily trip up the “same as last year” type approach to completing returns

Resisting penalties/interest

If you make a mistake and it was genuine (ignorance is no defence), then don’t assume that the penalty imposed by HMRC stands. Penalties should only be imposed if the mistake was careless, or worse. It is, however, much better to make sure your tax return is correct and suffer the £100 later filing penalty, than send in a rushed return on 31st January. The cost of any errors could be far worse than £100

Ticking the wrong boxes

HMRC provide a guide to completing returns that will help here, but this is an easy mistake to make, which may give HMRC the ammunition to raise a penalty.

Getting your Unique Tax Reference (UTR) wrong

HMRC may have difficulty matching your payment with the return or the processing of the return may get delayed leading to a delay in any repayment due. Either way, trying to sort this out over the phone at a time when everyone else is chasing could be a hassle.

My advice – speak to an expert and get it right first time! Two Rivers can prepare your self-assessment return for a competitive rate.

Please note: All rates and allowances are correct at the time of writing

Charity Bank is an ethical loans and savings bank for the social sector that has more than doubled the size of its loan book since the start of 2015. It is entirely owned by charitable foundations, trusts and social purpose organisations.

It only lends to charities and social enterprises and other organisations where the loan is for a social purpose. It offers loans from £50,000 up to £3.5 million and will work with other social lenders to provide larger loans. Repayment terms can be for up to 25 years.

Charity Bank also offers a range of competitively priced deposit accounts. This includes its recently launched Ethical Easy Access Account which been developed to meet the needs of charities and business savers.

All deposit accounts can be opened online and eligible deposits are protected by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme.

Details of Charity Bank’s loans can be found here and its deposit products here.

Contact their savings team for more information: call 01732 441944 email savings@charitybank.org or visit charitybank.org.

As Wimbledon, Notting Hill Carnival, music festivals and other summer events are upon us, it is worth discussing HMRC’s intention to crackdown on those people who earn income from such events but do not declare it on a tax return.